Association attorney, CPA, reserve specialist, engineer and other professionals

Why your board needs a bench of specialists

A board's decisions only get legal protection when the board actually earns it. Courts defer to a community association board's maintenance and repair decisions when the board investigated the question, acted in good faith, and stayed inside its own authority, a standard known as the business judgment rule.

"upon reasonable investigation, in good faith and with regard for the best interests of the community association and its members"

Source: Lamden v. La Jolla Shores Clubdominium Homeowners Assn., Supreme Court of California

Skip the right specialist before a big decision and you haven't saved money, you've removed the exact thing a court will look for if an owner later challenges the board's call.

The core team, and what each one is actually for

Four professionals show up on most boards' vendor lists, and each has a narrow job.

An attorney interprets your governing documents and state law, and drafts or reviews contracts and enforcement letters. Which situations actually require a lawyer, versus a manager or a board member handling it directly, varies by state and by how your declaration and bylaws were drafted.

A CPA handles the association's tax filings and financial statements. Most associations choose each year between a simplified tax election and a standard corporate return, and qualifying for the simpler form depends on passing income and expense tests.

"At least 60% of the association's gross income for the tax year must consist of exempt function income"

Source: Instructions for Form 1120-H, Internal Revenue Service

A reserve specialist prepares the reserve study, the long range funding plan behind every major repair the association will eventually pay for. An engineer gets called in for a specific technical question, a structural condition or a waterproofing failure, the kind of investigation a board needs on record before it picks a repair method.

Credentials are a checkable signal, use them

Property managers and reserve specialists both carry tiered, checkable credentials, so a board doesn't have to take a resume at face value. CMCA is the entry level manager credential; AMS is the second tier, requiring the CMCA plus coursework and two years of experience; PCAM sits at the top, requiring five years of experience and a case study analyzing an actual community association.

Reserve study preparation has its own separate credential, distinct from all three manager tiers.

"the most widely recognized reserve study credential in the community-association industry"

Source: Reserve Specialist Credentials Explained: RS vs. PRA, HOA Reserves

Before you hire an attorney, CPA, reserve specialist, or engineer, ask what credential or license they hold and what it actually required them to demonstrate.